Sessional_Paper_1884 — Page 527

SIR,

20

Treasury to Colonial Office.

TREASURY CHAMBERS,

17th September, 1879.

I am directed by the Lords Commissioners of Her Majesty's Treasury to acquaint you, for the information of the Secretary of State for the Colonies, that they referred your letter of the 13th January last on the subject of the currency of Hongkong, with its enclosures, to the Deputy Master of the Mint, and I am to forward herewith a copy of his reply, returning at the same time the correspondence which you sent to the Treasury in original.

My Lords gather from the letters of the Hongkong Chamber of Commerce and of the managers of the Oriental Bank and of the Chartered Mercantile Bank of India, London & China, enclosed in Mr. J. POPE HENNESSY's despatch of 18th May, 1877, that no actual inconvenience has been experienced in consequence of a scarcity of legal tender coin, and that the trading community is therefore only giving expression to apprehension of difficulties which may hinder the obtaining of Mexican Dollars at certain seasons.

The trading community would seek a remedy for this possible inconvenience in the re-establishment of the Hongkong Mint and the issue thence of a Hongkong Dollar, or in the coinage of a special-dollar at home. In other words, they ask that a sufficient supply of legal tender coins may be maintained at the cost of the Colonial Government, and, as the Deputy Master of the Mint has shewn, in his reports upon the subject, there is good reason for anticipating a considerable loss to the Colonial Government were either of the above mentioned expedients adopted. My Lords are glad to find that the Secretary of State concurs with this Board, and that he is not prepared to impose such a charge on the Colonial Revenue.

My Lords have next to consider whether the appehensions of the community could be safely met by the legalization of the American Trade Dollar and the Japanese Yen, and upon this point they recommend the exhaustive statement of the Deputy Master of the Mint to the attentive consideration of the Secretary of State.

It is an essential principle of sound currency that the contents in fine metal of coin admitted to legal tender should be well known and not liable to variation; also that the supply of such coin should be fairly certain, and it is the duty of every Government to ascertain that a coin satisfies these requirements before it proceeds to impose on its subjects the obligation of receiving such coin in payment of debts. The Deputy Master of the Mint proves conclusively that the American Trade Dollar and the Japanese Yen do not at present satisfy these conditions. The United States, Mint has been coining trade dollars, the fine silver in which exceeds the fine silver contained in Mexican Dollars, a matter of some inconvenience if the two are to circulate together; but it has now suspended the coinage of such dollars, and there